Bill 30, the Investing in a Diversified Alberta Economy Act, received royal assent on Dec. 9, establishing two tax credits that will propel diversification and job creation province-wide.
The Capital Investment Tax Credit (CITC) will encourage timely capital investments that offer opportunities for economic growth. The Alberta Investor Tax Credit (AITC) will encourage investors to provide entrepreneurs with greater access to the capital they need to innovate and expand.
Applicants will be able to apply for the tax credits online starting Jan. 16, 2017.
“Other provinces have enjoyed these types of tax credits for decades. Business leaders across the province helped us create these tax credits. With this legislation, we’ve made sure Alberta businesses have access to the supports they need to remain competitive and attract the investment they need to diversify and grow.”
With a budget of $70 million over two years, the CITC offers a 10 per cent, non-refundable tax credit of up to $5 million to Alberta companies involved in manufacturing, processing and tourism infrastructure. The CITC will be provided on a competitive basis to companies making eligible capital investments of $1 million or more.
With a budget of $90 million over three years, the AITC is applicable across sectors, offering a 30 per cent tax credit to investors who provide capital to Alberta small businesses doing research, development, or commercialization of new technology, new products or new processes. It is also applicable to businesses engaged in interactive, digital media development, video post-production, digital animation or tourism. The AITC will be provided on a first-come, first-served basis.
Together, the Alberta Investor Tax Credit and Capital Investment Tax Credit are expected to support 9,000 jobs and add $1.2 billion to Alberta’s GDP.
“A competitive tax environment is critically important to local businesses as well as to the companies we are trying to attract here as we diversify Calgary’s economy. Actions like these by governments help to encourage the large-scale capital investments by companies that support thousands of direct and indirect jobs in Alberta.”
The CITC will have four application intake periods, with the first beginning Jan.16, 2017 and ending Feb. 15, 2017.
Intake for the AITC will begin Jan. 16, 2017 and will remain open until the annual budget is allocated. Investments made as of April 14, 2016 may be retroactively eligible for the AITC.